The Egyptians were arrested near the desert border two weeks ago after crossing into Israel illegally, armed with an airgun and 14 knives. They were aged between 21 and 25.
Prosecutors told the magistrate's court in the southern Israeli town of Beersheba the students plotted to kidnap Israeli soldiers to use as bargaining chips for Palestinian prisoners.
They also intended to hijack an army tank, kill its crew and then rob a bank to get money that could be used to fund further attacks on Israel, prosecutors said.
Local media said lawyers for the Egyptians were studying the charges pending a plea.
The students had tried to enter Israel many times over the past three years, the prosecutors said.
Israel's desert border with Egypt is a popular trafficking route for drugs and prostitutes, though border patrols have occasionally caught militants and arms smugglers.